Financial Analysis

Commitments and Contingencies Financial instruments with off-balance sheet risk : The Company is party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit and standby letters of credit. These instruments involve, to varying degrees, elements of credit risk in excess of the amount recognized in the consolidated balance sheets. The Companys exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit and standby letters of credit is represented by the contractual amount of those instruments. The Company uses the same credit policies in making commitments and conditional obligations that it uses for on-balance sheet instruments. Commitments to lend are subject to borrowers continuing compliance with existing credit agreements. The Companys commitments consisted of the following amounts as of December 31, 2025 and 2024. 2025 2024 Commitments to fund real estate construction loans $ 152,936 $ 180,986 Other commitments to extend credit 589,309 598,510 Standby letters of credit 13,291 10,734 $ 755,536 $ 790,230 Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract and generally expire within one year. Commitments to extend credit of approximately $149,250 at December 31, 2025, ha …

CommitmentsAndContingenciesDisclosureTextBlock · excerpt; the full note is in the filing

401(k) Retirement Plan and Employee Stock Ownership Plan The Company has a combined defined contribution plan and employee stock ownership plan covering substantially all of its employees. Matching and discretionary contributions are determined annually by the Board. The Company matched 100 percent of the first six percent of employee deferrals and made an annual discretionary contribution of four percent of eligible employee compensation for the year ended December 31, 2025, and two percent of eligible employee compensation for the years ended December 31, 2024 and 2023. Total matching and discretionary contribution expense for the years ended December 31, 2025, 2024 and 2023, totaled $1,652, $1,273 and $1,207, respectively. As of December 31, 2025 and 2024, the plan held 350,160 and 326,523 shares, respectively, of the Companys common stock. These shares are included in the computation of earnings per share. Dividends on shares held in the plan may be reinvested in Company common stock or paid in cash to the participants, at the election of the participants. …

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Stock Compensation Plans The West Bancorporation, Inc. 2021 Equity Incentive Plan (as amended, the 2021 Plan) was originally approved by the stockholders in April 2021. The 2021 Plan replaced the West Bancorporation, Inc. 2017 Equity Incentive Plan (the 2017 Plan). Upon approval of the 2021 Plan, the 2017 Plan was frozen and no new grants will be made under that plan. Outstanding awards under the 2017 Plan will continue pursuant to their terms and provisions. The 2021 and 2017 Plans are administered by the Compensation Committee of the Board of Directors, which determines the specific individuals who will be granted awards under the 2021 Plan and the type and amount of any such awards. The 2021 Plan was originally approved at the April 2021 annual stockholders meeting and authorized 625,000 shares, and at the April 2024 annual stockholders meeting, the Company obtained stockholder approval to increase the number of shares of common stock authorized for issuance under the 2021 Plan by 550,000 shares, from 625,000 shares to 1,175,000 shares. All employees and directors of the Company and its subsidiary are eligible to become participants in the 2021 Plan. Under the terms of the 2021 Plan, the Company may grant a total of 1,175,000 shares of the Companys common stock as stock awards and cash incentive awards. As of December 31, 2025, 515,311 shares of the Companys common stock remained available for future awards under the 2021 Plan. Under the 2021 Plan, the Company may grant RS …

DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock · excerpt; the full note is in the filing

Fair Value Measurements Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants in the market in which the reporting entity transacts business. The Companys balance sheet contains securities available for sale and derivative instruments that are recorded at fair value on a recurring basis. The three-level valuation hierarchy for disclosure of fair value is as follows: Level 1 uses quoted market prices in active markets for identical assets or liabilities. Level 2 uses observable market-based inputs or unobservable inputs that are corroborated by market data. Level 3 uses unobservable inputs that are not corroborated by market data. The Companys policy is to recognize transfers between levels at the end of each reporting period, if applicable. There were no transfers between levels of the fair value hierarchy during 2025 or 2024. The following is a description of valuation methodologies used for financial assets and liabilities recorded at fair value on a recurring basis. Securities available for sale: When available, quoted market prices are used to determine the fair value of securities (Level 1). If quoted market prices are not available, the Company determines fair value based on various sources and may apply matrix pricing with observable prices for similar bonds where a price for the identical bond is not observable (Level 2). The fair values of these securities are d …

FairValueDisclosuresTextBlock · excerpt; the full note is in the filing

Income Taxes The Company files income tax returns in the U.S. federal and various state jurisdictions. Income tax returns for the years 2022 through 2025 remain open to examination by federal and state taxing authorities. No material income tax related interest or penalties were recognized during the years ended December 31, 2025, 2024 or 2023. The following table shows the components of income taxes for the years ended December 31, 2025, 2024 and 2023. 2025 2024 2023 Current: Federal $ 6,579 $ (645) $ 3,485 State 1,927 1,056 1,717 Deferred: Federal 349 2,573 226 State 3 409 221 Income taxes $ 8,858 $ 3,393 $ 5,649 Total income taxes for the years ended December 31, 2025, 2024 and 2023 differed from the amount computed by applying the U.S. federal income tax rate of 21 percent to income before income taxes, as shown in the following table. 2025 2024 2023 Amount Percent of Pretax Income Amount Percent of Pretax Income Amount Percent of Pretax Income Income taxes at statutory federal tax rate $ 8,698 21.0 % $ 5,763 21.0 % $ 6,255 21.0 % State income tax expense, net of federal income tax benefit 1,588 3.8 1,267 4.6 1,395 4.7 Tax credits Low income housing credits (660) (1.6) (740) (2.7) (730) (2.4) New markets tax credit (768) (2.8) (768) (2.6) Energy-related investment tax credit (614) (1.5) (1,842) (6.7) Nontaxable or Nondeductible Items Tax-exempt interest income (1,175) (2.8) (1,404) (5.1) (1,445) (4.9) Nondeductible interest expense to own tax-exempt securities 973 2.3 1,2 …

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Operating Leases The Company leases real estate for four branch offices. The lease agreements have maturity dates ranging from September 2030 to September 2036, some of which include options to renew at the Company's discretion. If at lease inception, the Company considers the exercising of a renewal option to be reasonably certain, the Company will include the extended term in the measurement of the right-of-use asset and lease liability. The weighted average remaining lives of the lease terms used in the measurement of the operating lease liability were 8.7 years and 9.6 years as of December 31, 2025 and 2024, respectively. The discount rate used in determining the lease liability at lease commencement or extension is the FHLB fixed advance rate which corresponds with the remaining lease term. For operating leases existing prior to January 1, 2019, the rate for the remaining lease term as of January 1, 2019, was used. The weighted average discount rates used in the measurement of the operating lease liabilities were 4.07 percent and 4.06 percent as of December 31, 2025 and 2024, respectively. Operating lease right-of-use assets are included in premises and equipment. Operating lease liabilities of $4,140 and $4,551 were included in other liabilities as of December 31, 2025 and 2024, respectively. Rent expense related to these leases was $573, $972 and $1,510, for the years ended December 31, 2025, 2024 and 2023, respectively. Total estimated rental commitments for the opera …

LesseeOperatingLeasesTextBlock · excerpt; the full note is in the filing

Long-Term Debt In December 2021, the Company entered into a credit agreement with a commercial bank and borrowed $40,000. Interest under the term note is payable quarterly over five years. Required quarterly principal payments are $1,250, with the remaining balance due February 2027. The Company may make additional principal payments without penalty. The interest rate is variable at the Wall Street Journal Prime Rate minus 1.00 percent, which totaled 5.75 percent as of December 31, 2025. The Company has an interest rate swap contract that effectively converts $20,000 of the borrowings to a fixed rate of 6.40 percent. See Note 11 for additional information on the interest rate swap. In the event of default, the unaffiliated commercial bank may accelerate payment of the loan. The outstanding principal balance of the loan was $26,250 and $31,250 as of December 31, 2025 and 2024, respectively. The loan is secured by 100 percent of West Banks stock. Future required principal payments for long-term debt as of December 31, 2025 are shown in the table below. 2026 $ 5,000 2027 21,250 $ 26,250 …

LongTermDebtTextBlock · excerpt; the full note is in the filing

Current accounting developments : In October 2023, the FASB issued ASU No. 2023-06, Disclosure Improvements: Codification Amendments in Response to the SECs Disclosure Update and Simplification Initiative . The ASU incorporates certain SEC disclosure requirements into the FASB A ccounting Standards Codification TM. . The amendments in the ASU are expected to clarify or improve disclosure presentation requirements of a variety of Codification Topics, allow users to more easily compare entities subject to the SECs existing disclosures with those entities that were not previously subject to the requirements, and align the requirements in the Codification with the SECs regulations. For entities subject to the SECs existing disclosure requirements and for entities required to file or furnish financial statements with or to the SEC in preparation for the sale of or for purposes of issuing securities that are not subject to contractual restrictions on transfer, the effective date for each amendment will be the date on which the SEC removes that related disclosure from its rules. For all other entities, the amendments will be effective two years later. However, if by June 30, 2027, the SEC has not removed the related disclosure from its regulations, the amendments will be removed from the Codification and not become effective for any entity. These amendments have not had an impact to the Company as of December 31, 2025. In December 2023, the FASB issued ASU No. 2023-09, Income Taxes …

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Commitments and Contingencies Financial instruments with off-balance-sheet risk : The Company is party to financial instruments with off-balance-sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit and standby letters of credit. These instruments involve, to varying degrees, elements of credit risk in excess of the amount recognized in the consolidated balance sheets. The Company's exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit and standby letters of credit is represented by the contractual amount of those instruments. The Company uses the same credit policies in making commitments and conditional obligations that it uses for on-balance-sheet instruments. The Company's commitments consisted of the following amounts as of June 30, 2026 and December 31, 2025. June 30, 2026 December 31, 2025 Commitments to fund real estate construction loans $ 195,832 $ 152,936 Other commitments to extend credit 491,502 589,309 Standby letters of credit 13,817 13,291 $ 701,151 $ 755,536 West Bank previously executed Mortgage Partnership Finance (MPF) Master Commitments (Commitments) with the FHLB of Des Moines to deliver residential mortgage loans and to guarantee the payment of any realized losses that exceed the FHLB's first loss account for mortgages delivered under the Commitments. West Bank receives cred …

CommitmentsAndContingenciesDisclosureTextBlock · excerpt; the full note is in the filing

Fair Value Measurements Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants in the market in which the reporting entity transacts business. The Company's balance sheet contains securities available for sale and derivative instruments that are recorded at fair value on a recurring basis. The three-level valuation hierarchy for disclosure of fair value is as follows: Level 1 uses quoted market prices in active markets for identical assets or liabilities. Level 2 uses observable market-based inputs or unobservable inputs that are corroborated by market data. Level 3 uses unobservable inputs that are not corroborated by market data. The Company's policy is to recognize transfers between levels at the end of each reporting period, if applicable. There were no transfers between levels of the fair value hierarchy during the six months ended June 30, 2026. The following is a description of valuation methodologies used for financial assets and liabilities recorded at fair value on a recurring basis. Securities available for sale: When available, quoted market prices are used to determine the fair value of securities (Level 1). If quoted market prices are not available, the Company determines fair value based on various sources and may apply matrix pricing with observable prices for similar bonds where a price for the identical bond is not observable (Level 2). The fair values o …

FairValueDisclosuresTextBlock · excerpt; the full note is in the filing

Income Taxes Net deferred tax assets consisted of the following as of June 30, 2026 and December 31, 2025. June 30, 2026 December 31, 2025 Deferred tax assets: Allowance for credit losses $ 7,891 $ 7,889 Net unrealized losses on securities available for sale 23,063 23,036 Lease liabilities 967 1,019 Accrued expenses 261 236 Restricted stock unit compensation 706 1,041 State net operating loss carryforward 2,433 2,325 Other 213 200 35,534 35,746 Deferred tax liabilities: Right-of-use assets 928 981 Deferred loan costs 227 227 Net unrealized gains on interest rate swaps 1,089 462 Premises and equipment 5,563 5,572 Other 142 254 7,949 7,496 Net deferred tax assets before valuation allowance 27,585 28,250 Valuation allowance (2,433) (2,325) Net deferred tax assets $ 25,152 $ 25,925 The Company has recorded a valuation allowance against the tax effect of the state net operating loss carryforwards, as management believes it is more likely than not that these carryforwards will expire without being utilized. The state net operating loss carryforwards expire in 2026 and thereafter.

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Current accounting developments : In October 2023, the FASB issued ASU No. 2023-06, Disclosure Improvements: Codification Amendments in Response to the SECs Disclosure Update and Simplification Initiative . The ASU incorporates certain SEC disclosure requirements into the FASB Accounting Standards Codification TM. . The amendments in the ASU are expected to clarify or improve disclosure presentation requirements of a variety of Codification Topics, allow users to more easily compare entities subject to the SECs existing disclosures with those entities that were not previously subject to the requirements, and align the requirements in the Codification with the SECs regulations. For entities subject to the SECs existing disclosure requirements and for entities required to file or furnish financial statements with or to the SEC in preparation for the sale of or for purposes of issuing securities that are not subject to contractual restrictions on transfer, the effective date for each amendment will be the date on which the SEC removes that related disclosure from its rules. For all other entities, the amendments will be effective two years later. However, if by June 30, 2027, the SEC has not removed the related disclosure from its regulations, the amendments will be removed from the Codification and not become effective for any entity. These amendments have not had an impact to the Company as of June 30, 2026. In November 2024, the FASB issued ASU No. 2024-03, Income Statement-R …

NewAccountingPronouncementsPolicyPolicyTextBlock · excerpt; the full note is in the filing